When Washington residents voted in 1998 to raise the states minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasnt been borne out.

In the 15 years that followed, the states minimum wage climbed to $9.32 -- the highest in the country. Meanwhile job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washingtons restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.

Yes, there is a correlation, but how do we know there is causation as well?

On a national level, 60% of employed people are paid hourly, and less than 5% of those hourly paid workers make minimum wage or less. Considering minimum wage makes up a very small percentage of the workforce, I don't see how raising it would have such an impact.

I haven't looked for Washington's breakdown, but do they have a significantly larger percentage of people working at minimum wage than the country does at a whole?

How does Washington compare to other states when it comes to job creation over the same time frame?

Click to expand...

According to this link (pdf), Washington is currently pretty average in terms of unemployment, and their job creation rate seems to beat the US average. It's odd, though…the graph states that job losses are higher than the US average, but in the text below, their unemployment rate drops faster than the US average. it should also be noted that they have a much higher median household income, a much lower poverty rate, and more people on health insurance.

Yes, there is a correlation, but how do we know there is causation as well?

On a national level, 60% of employed people are paid hourly, and less than 5% of those hourly paid workers make minimum wage or less. Considering minimum wage makes up a very small percentage of the workforce, I don't see how raising it would have such an impact.

I haven't looked for Washington's breakdown, but do they have a significantly larger percentage of people working at minimum wage than the country does at a whole?

Is there info on what jobs increased in Washington?

Click to expand...

You're not considering the people who make a little over minimum wage, which is a lot more than 5%. Even though they aren't paid the minimum, they'll still be affected by an increase. Let's say the lowest position at a business pays the minimum and the next position up pays 20 cents more an hour. If the minimum wage goes up 20 cents, the wages of both employees likely go up, otherwise the lowest employee has no incentive to move up the ladder. Even employees that would already be above the new minimum wage would likely receive an increase due to the previously stated reason of employers needing to maintain a sufficiently stratified pay scale. How far up the pay scale a minimum wage increase has an impact likely depends upon the size of the wage increase.

You're not considering the people who make a little over minimum wage, which is a lot more than 5%. Even though they aren't paid the minimum, they'll still be affected by an increase. Let's say the lowest position at a business pays the minimum and the next position up pays 20 cents more an hour. If the minimum wage goes up 20 cents, the wages of both employees likely go up, otherwise the lowest employee has no incentive to move up the ladder. Even employees that would already be above the new minimum wage would likely receive an increase due to the previously stated reason of employers needing to maintain a sufficiently stratified pay scale. How far up the pay scale a minimum wage increase has an impact likely depends upon the size of the wage increase.

Click to expand...

I'm not so sure a minimum wage increase will bump up everyone's wage as a ripple effect. That's going to vary by business.

Either way, I still do not see any evidence that the minimum wage increase in WA directly increased employment overall. Increasing price does not usually lead to an increase in supply.

Yes, there is a correlation, but how do we know there is causation as well?

On a national level, 60% of employed people are paid hourly, and less than 5% of those hourly paid workers make minimum wage or less. Considering minimum wage makes up a very small percentage of the workforce, I don't see how raising it would have such an impact.

Click to expand...

As another poster said, this isn't just about the "5% who make minimum wage", which is a stat the apologists love to use. There are tons os positions out there which pay no more than a dollar over minimum wage. That's still a terrible wage, but it doesn't factor into the minimum wage discussions.

So what percentage of workers make $7.50 an hour? $7.75? $8.00? That's really not much better, but you don't hear those numbers. Just "5%!!"

So what impact would raising the minimum have? Well, what kind of impact are you looking for? My wife finally quit her $8 an hour job that she liked having, because it cost her more to work than to stay at home (after paying for child care). And that was for a pottery studio assistant, so something I would consider above "burger flipper". But, that's what's paid these days. She could have kept working there if they paid anything remotely useful.

I've also showed before what a drastic affect a large raise could have on Wal-mart workers (and other companies), and the pretty small price increase that would result. What affect do you think it would have if millions of workers in the US were making 50% more in wages, but their expenses rose only 5-8%?

I'm not so sure a minimum wage increase will bump up everyone's wage as a ripple effect. That's going to vary by business.

Click to expand...

Well, obviously not "everyone" is going to see a wage increase due to a minimums wage increase. I would not expect my wage to raise at all, as I'm already well-compensated for what I do. I would think if the minimum was raised from $7.25 to $9.00, the ripple might end around $17 or so.

Quote

Either way, I still do not see any evidence that the minimum wage increase in WA directly increased employment overall. Increasing price does not usually lead to an increase in supply.

Click to expand...

I don't think that was anyone's point. I think the point was that increasing the minimum wage didn't kill jobs, as is pounded upon us in every discussion on the subject.

Raising the minimum wage from $7.25 to $10.10 an hour would reduce federal food stamp spending by $4.6 billion a year, according to a report to be released Wednesday by the liberal-leaning Center for American Progress.

The proposal, a top legislative priority for President Obama and congressional Democrats, would reduce enrollment in the food stamp program by as much as 9.2 percent, the report said.

The minimum wage acts as a barrier to employment for first-time job seekers and less skilled people. Raising the minimum wage will cause job losses and prevent people (especially those at the low end) from being able to get jobs. Wouldn't that increase the number (and spending) on SNAP benefits?

Isn't that the whole point of this thread? And wasn't it shown above that the raising of the minimum wage didn't affect jobs in Washington the way you describe?

Click to expand...

No one should be confident that they can predict the minimum wage statutes effect without detailed knowledge of what the rest of the economy is doing. At least in Washington state, there are other factors at work (overall called "productivity") that pushed overall wages higher, so that an increase in the minimum wage could be absorbed. The Fortune 500, aircraft, finance, and tech companies in the Seattle area have been growing, attracting top talent and increasing wages at the higher end, and that brings a lot of other industries along too, such as the suppliers, restaurants, hotels, etc., where there are more workers at the lower end. To paraphrase Pres. Kennedy, a rising tide for the big players is enough to lift many, many boats.

MacRumors attracts a broad audience
of both consumers and professionals interested in
the latest technologies and products. We also boast an active community focused on
purchasing decisions and technical aspects of the iPhone, iPod, iPad, and Mac platforms.